Markets Defused gives an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Tesla is Wall Street’s “most undervalued AI play” says broker
- Pfizer is advancing a GLP weight loss pill
- Apple strikes ‘tap and go’ agreement with European Union
- PepsiCo stock dented amid snack slowdown
- Rosebank Industries makes bullish London debut
- Dr Martens comfortable as first quarter met expectations
- City of London’s IPO prospects boosted by new rules
Tesla is Wall Street’s “most undervalued AI play” says broker
Tesla Inc (NASDAQ:TSLA) is Wall Street’s “most undervalued AI play”, that’s according to West Coast stockbroker Wedbush, which today repeated an ‘outperform’ rating with a $300 twelve-month price target that suggests some 14% upside to the current share price of $263.26.
The broker’s premise is that next month’s so-called ‘robotaxi’ day – prencilled in for 8 August – will see Tesla and Elon Musk layout an AI-centric roadmap for growth.
“The key for Tesla's stock looking ahead is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla that will lay the yellow brick road to FSD and an autonomous future,” Wedbush analyst Daniel Ives said in a note.
“We believe the AI story could be worth $1 trillion alone to the broader Tesla story over the coming years.”
Pfizer is advancing a GLP weight loss pill
Pfizer Inc (NYSE:PFE, ETR:PFE) stock started Thursday strongly, and was up a more modest 1% as trading settled down, after the drug maker confirmed it was advancing a once-daily weight-loss pill.
The drug, danuglipron, was previously explored as a twice-daily pill but that program was discontinued due to patient intolerance.
Pfizer now sees more encouraging data from early-trials of its latest formulation. Dose-optimisation studies are now slated for the second half of this year, with results coming next year.
Like Ozempic, Danuglipron is a glucagon-like peptide-1 (GLP-1) receptor agonist, which boosts ‘satiety’ by slowing down digestion – which means that it promotes weight loss by improving signals to the brain that the person is “full”.
Unlike Ozempic, if successful, Pfizer’s treatment will be an oral pill rather than a weekly injection.
Apple strikes ‘tap and go’ agreement with European Union
Apple Inc (NASDAQ:AAPL, ETR:APC) has agreed a deal with the European Union to resolve a row over Apple Pay and the use of near-field communication (NFC) on iPhones.
It sees Apple concede to allow third-party developers to use the iPhone’s NFC capabilities for third-party payment wallets.
The agreement means Apple will avoid a massive antitrust fine that, according to media commentators, could have run up 10% of its global turnover (which could’ve meant some $40 billion).
Meanwhile, according to the European Commission, the new arrangements prevent Apple from excluding rival mobile wallets from the iPhone ecosystem.
PepsiCo stock dented amid snack slowdown
PepsiCo Inc (NASDAQ:PEP, ETR:PEP) shares were on the back foot, albeit recovering somewhat, after it reported quarterly revenue shy of market forecasts.
The soda and snacks company did give the market better-than-expected earnings – $2.28 per share versus $2.16 - for the second quarter, but, cautioned over an underperforming snacks and food segment which left investor sentiments on the bearish side.
Revenue for the second quarter came in at $22.5 billion, compared to a consensus market forecast of $22.59 billion.
Looking ahead, PepsiCo pitched its full-year organic revenue growth outlook to 4%, down from a somewhat woolly prior guidance of "at least 4%".
Chief executive Ramon Laguarta noted that consumers across all income levels are more value-conscious, shifting increasingly towards cheaper store brands and fewer purchases.
Rosebank Industries makes bullish London debut
Rosebank Industries (LSE:ROSE) saw a bullish stock market debut in London with investors quick to get back onboard with a management team that’s got a proven track record.
Trading at 477.5p, the newly listed shares are up from the 250p issue price in Rosebank’s IPO.
The company, which is currently a cash-shell, raised £50 million of new capital in the IPO which had set a market valuation of £88 million ahead of the float.
Investors have high expectations for the company, given the management’s previous success with Melrose which came to market as a small company in 2003 and hit a peak value of £12 billion in 2020.
Rosebank executives Simon Peckham and Christopher Miller steered Melrose for much of that timeline, and investors are evidently keen to back this new venture.
Like Melrose, Roseban intends to undertake "buy, improve, sell" strategy, targeting undervalued and underperforming industrial or manufacturing businesses in the UK, Europe, and North America.
Attention will now be peeled to see what deals come the vehicle's way in the coming months.
Dr Martens comfortable as first quarter met expectations
Dr Martens PLC (LSE:DOCS) shares traded positively, up around 3% on Thursday, as it confirmed its first quarter had met expectations – with management focusing on cost-cutting and pushing for greater ‘direct-to-consumer’ selling.
The comments came this morning, in a brief statement ahead of today’s AGM.
The company expects financial results to be heavily weighted towards the second half of the year, noting that Q1 is the boot maker’s ‘smallest’ period of the financial year.
It highlighted that it is focusing on the upcoming autumn/winter 2024 season and is implementing detailed trading plans.
A key focus is on achieving positive direct-to-customer growth in the US. Meanwhile, more broadly, cost action plans are ongoing - with the company promising a more detailed update when it reports on its first half, in November.
In London, the share was up 2.25p or 3.05% closing the session at 75.90p.
City of London’s IPO prospects boosted by new rules
As the wind of change blows through British government, London’s financial regulator is also shaking things up – with proposals to change listing rules to make the UK capital more attractive for companies.
The Financial Conduct Authority (FCA) today announced what are described as the biggest changes to the UK's stock market rules in over 30 years – with the new ones coming into effective from July 29, 2024.
It seeks to attract a broader range of companies to list in the UK, by aligning London with international standards to boost growth and innovation.
This new regime intends to merge the existing two-tier system of standard and premium listings on the London Stock Exchange into a single category – though this will still remain separate to the Alternative Investment Market (AIM).
The idea is that it will simplify the listing process and reduce the associated costs of retaining a listing in London.